Coinbase (COIN), Bybit said to be working together on tokenization, custody and distribution of U.S. stocks

Crypto exchange Coinbase (COIN) is working with Bybit, one of the largest crypto trading platforms, to explore ways to tokenize, custody and distribute assets such as U.S. public and pre-IPO stocks, a person familiar with the plans told CoinDesk.

The talks, which are in progress, do not involve any sort of stake acquisition or similar deal for Bybit to enter the U.S., said the person, who asked to remain anonymous because they are directly involved in the discussions, dismissing a report of an investment publicized last month.

Bybit is, indeed, planning to enter the U.S., just not with Coinbase, said the person, who declined to identify the partner. It will create a new entity said to be spearheaded by former Bybit co-CEO Helen Liu. The local partner will provide licensing and compliance while Bybit provides the tech, product and liquidity, the person said.

Discussions between Bybit and Coinbase are more global in nature, leveraging Bybit’s worldwide reach, particularly in places like Asia, where users may want access to tokenized versions of U.S. stocks. As such, the firms are exploring synergies around custody and distribution of these assets going forward.

The U.S. is home to certain assets that global users want, the person said. Bybit is international, while Coinbase is U.S.-focused. Working together, the two can bring U.S. assets to a wider market, according to the person. Within five years, tokenization will bring any asset to users globally through a single app.

“Even if Coinbase becomes a super app in the U.S., they are still only in the U.S,” the person said.

The two companies’ explorations into tokenized stocks come as other market participants explore similar link-ups. Intercontinental Exchange (ICE), the owner of the New York Stock Exchange, in March announced it was taking a stake in crypto exchange OKX. Just last week, Deutsche Boerse, made a $200 million strategic investment into Kraken.

Bybit and Coinbase both declined to comment.

CORRECT (April 20, 14:03 UTC): Corrects spelling of Liu in second bullet point.

UPDATE (April 20, 14:50 UTC): Adds Coinbase-Bybit relation in U.S., Bybit’s U.S. entry plans starting in third paragraph.